Whether you’re moving from an employer-sponsored health insurance plan or from an Affordable Care Act (ACA) health insurance plan, there are some things you should know. As we move closer to the Open Enrollment Period for 2021 health plans, it’s important to understand common mistakes that people make when enrolling in or switching health insurance plans. Avoiding these blunders may save you some serious money...and your sanity.
When switching health insurance plans, it can be tempting to find the first one that “works” and to go with it. While it may save you some time, it could cost you later. Many ACA-compliant plans will auto-renew your coverage from year-to-year, so if you are trying to switch, be aware of this and understand the timing around when you can enroll in a different plan.
It’s important to reassess your health needs each year to ensure the plans at which you’re looking can provide adequate coverage at a reasonable cost. Self-employed people must be especially cognizant of how their income could change from year to year and how that may impact which health plan is best.
Switching from one plan to no plan can be a big mistake. While there is no longer a penalty in place for not carrying health insurance, the costs can be steep. Without health insurance, one illness, accident, or injury could rack up thousands of dollars in medical bills that you would have to pay out of your own pocket.
It may be tempting to avoid enrolling in a plan if you are young and healthy; however, no one can predict the future. At the very least, it can be good to carry a high-deductible health plan (HDHP) that has a low monthly premium and a higher deductible. This allows you to lower the cost of having health insurance without putting yourself at risk for paying substantial medical bills if something does happen. What’s more, many HDHPs enable you to use a health savings account (HSA), which allows you to make pre-tax contributions to an account that can be used to pay for certain eligible health care expenses.
While HDHPs can be appealing to those who don’t plan on using their health insurance often, it can also look unappealing to those who do use their health insurance a lot. Before ruling out HDHPs entirely, consider some of the benefits and how they may apply to your unique circumstances. For example, under the ACA, HDHPs must cover certain preventive services, which may include:
These things may be covered before the deductibles come into play. Additionally, when paired with an HSA, members enjoy significant tax advantages.
It is important to factor all of this into your decision when choosing or switching a health plan as it could equate to lower medical expenses throughout the year. While HDHPs certainly offer benefits for healthy people, they can also be a strategic way for those with health conditions to manage healthcare costs.
While low premium plans are appealing for those on a tight budget, it’s important to consider all of the costs associated with a health plan. Health plans with low premiums may cost less upfront, but they may call for greater out of pocket costs further down the road. While there is no one right answer as everyone has unique circumstances, it can be a bad move to only look at plans with low premiums when switching health insurance.
People with preexisting conditions or other chronic health needs may find it more cost-effective to switch to a plan with a higher premium and lower cost-sharing. It’s important to consider how much you can afford to pay, both upfront and over time. Remember that ACA plans have out-of-pocket limits, which are $8,150 for an individual and $16,300 for a family for the 2020 year.
Decent understands the need for affordable, comprehensive health care options. Whether you’re looking for a brand new plan or trying to switch health insurance plans, don’t forget we offer several different options for you.
Even better -- our plans are built around the Direct Primary Care (DPC) model, which encourages members to see a primary care doctor. The incentive? We make it free to see your doctor. What’s more—you can see them via same-day or next-day appointments and we offer virtual visits if you’re in a crunch and can’t make it into the office. Our plans are also open to enroll in year-round, so you don’t have to stress out during a small window about which plan makes sense for you. Perhaps most importantly, our plans run up to 50% below market rates, making them incredibly affordable. Get a free quote today.